Management Accounting Report for EverJoy Enterprises (UK)

This report serves as a comprehensive management accounting analysis for EverJoy Enterprises, a UK-based leisure and entertainment company. It delves into the core concepts of management accounting, differentiating it from financial accounting and exploring various cost accounting systems, including direct costs and standard costing. The report examines inventory management systems, job costing systems, and different types of management accounting reports. It also includes a numerical problem-solving section that calculates the break-even point and profit projections for a concert event, offering insights into profitability. Furthermore, the report evaluates the role of budgeting as a planning and problem-solving tool, and assesses the importance of strong financial governance in preventing financial issues, offering recommendations for sustainable success. The report includes references and appendices to support its findings and recommendations, providing valuable information for EverJoy Enterprises.

Management Accounting report for EverJoy
Enterprises
1

Table of Contents
Introduction....................................................................................................................................2
Task – (LO1)..................................................................................................................................3
Management Accounting.............................................................................................................3
a. Differences between Management Accounting and Financial Accounting.............................5
b. Cost accounting systems (Direct Costs and Standard Costing)...............................................7
c. Inventory Management Systems............................................................................................10
d. Job Costing Systems..............................................................................................................12
e. Different types management accounting reports....................................................................14
f. The need for a sound accounting system and the importance of the department producing
timely, accurate and relevant information..................................................................................17
Task 2 – (LO2).............................................................................................................................19
a. The number of tickets that must be sold to break even (i.e. the point at which there is neither
profit nor loss)............................................................................................................................19
b. If we want to make a profit of £30,000.00, how many tickets should be sold?.....................20
c. What profit would result if 8,000 tickets were sold?.............................................................21
Task 3 – (LO3 & 4)......................................................................................................................22
a. You are to evaluate how budgeting can be used by Ever Joy Enterprises as a planning and
problem-solving tool in dealing with financial problems, but also for leading the organization
to sustainable success.................................................................................................................22
b. You are to also evaluate how strong financial governance can help to pre-empt or prevent
financial problems for Ever Joy Enterprises and the means by which management accounting
systems can contribute...............................................................................................................25
Conclusion....................................................................................................................................28
References.....................................................................................................................................29
Appendix.......................................................................................................................................31
2

Introduction
This report will be prepared to discuss the concept of management accounting and write a
reference manual for Ever Joy Enterprises (UK) that operates in leisure and entertainment
industry in the UK. This report delineates the concept of cost accounting systems, job costing
systems, and Inventory Management systems; differentiate between management accounting and
financial accounting. This report will also solve a numerical problem to help Ever Joy
Enterprises (UK) reviewing its concert event in Manchester region to ascertain its viability by
calculating break-even point (i.e. the point at which there is neither profit nor loss) and other
profitability related requirement. This report will also advise Ever Joy Enterprises (UK) on using
budgeting as a pillar for planning purposes within the organization.
3

Task – (LO1)
Management Accounting
Management accounting is the presentation of accounting information in such a way as to assist
management in the formulation of policy and the day-to-day operation of an enterprise. The
management accounting collected the accounting data with the help of financial accounting and
cost accounting for the purpose of policy planning, formulation, decision making and control for
the enterprises. Management accounting is the vital branch of accounting which assists to the
management in the preparation of various reports and strategies for their departments which
enhance their productivity and efficiency. Various management accounting tools and techniques
assist to the enterprises to achieve their goals and objectives on a systematic manner. In other
words, management accounting is an important decision-making tool and technique used
internally by the management. Tools and techniques like cost-volume-profit analysis, variance
analysis, budgeting, break even analysis are some of the prominent tools and techniques used in
the management accounting (Edmonds, et. al., 2016).
Objectives of management accounting
 Helps to the management of an enterprises in planning and formulation of policies for future
 Helps to the management in an interpretation of financial information
 Helps in coordinating operations
 Helps in evaluating the efficiency and effectiveness of policies
 Helps in controlling performance
Main tools and techniques used in management accounting are listed below:
 Cost accounting
 Absorption and marginal costing
 Fund flow analysis
 Cash flow analysis
 Standard costing
 Budgetary control
4

Advantages Disadvantages
Increases efficiency of the enterprises Biased interpretation
Simplifies the decision making in
financial statements
Lack of knowledge
Cost transparency Impracticable in nature
Assist in goal completion Preferences depends upon experience and
intuition
Flexibility and freedom Lack of objectivity
Figure: Functions of management accounting
By Author, 2018
5
Functions of
management
accounting
Forecasting
and
planning
Organising
Coordinatin
g
Controlling
performanc
e
Financial
analysis
and
interpretati
on
Communic
ation

a. Differences between Management Accounting and Financial Accounting.
The management accounting and financial accounting both are important part of accounting
which assists the enterprise to achieve their targets on a time and also provides useful
information to their stakeholders. Some of the difference are summarized in the table which are
mentioned below:
Points of difference Management Accounting Financial Accounting
Definition Management accounting is
an accounting framework
that makes use of accounting
and cost data to enable the
management to make
effective business plans
(Weygandt, et. al., 2015).
Financial accounting is an
accounting framework
which records myriad of
business transactions and
then summarizes and
records the same in the
prescribed format.
Format of reporting There is no standardized
format prescribed by
regulatory bodies. Since, it
is internal use, the format
can be altered as per
modalities of the business
and other factors (Warren,
et. al., 2013).
While transaction is
accounted for on a daily
basis, there is a standardized
format that needs to be
followed prescribed as per
the relevant applicable act.
Report It includes summarized form
of non- monetary (various
reports and policies) and
It includes various final
accounts of the company
like trial balance, balance
6

monetary (balance sheet,
profit and loss) transactions.
sheet, cash flow statement,
trading & profit and loss
account.
Statutory requirement It is the statutory
requirement to get the books
of accounts audited.
There is no such statutory
requirement as the
information is used by the
management.
Purpose The management accounting
is used for internal purpose.
The financial accounting is
used for external purpose.
The above points show some difference in between management accounting and financial
accounting. The management accounting assists to the management in preparation of financial
accounting for the enterprise in every financial year. The management accounting has a wider
scope than the financial accounting. It involves financial accounting and cost accounting which
assists to the management in preparation of plans and policies (Weygandt, et. al., 2015).
7

b. Cost accounting systems (Direct Costs and Standard Costing)
Cost accounting is an accounting mechanism in which all costs incurred are collected, classified
and recorded. Cost accounting helps in allocating cost incurred on producing various products by
segregating it into direct cost, indirect cost and fixed cost. Cost accounting computes the unit
cost of a product which enables to ascertain cost of stock at the end of the year and cost of goods
sold during the year. It analyses the cost structure of the business. Cost accounting helps the
management in determining where a business is gaining or losing money. Cost accounting helps
the management in determining how the business earns and make use of them. It can be used as a
tool to minimize the cost of production by eliminating any unnecessary expenses/losses incurred
while producing a product. It provides necessary cost information for planning, implementing
and controlling. It is instrumental in assessing the profitability of various products which can be
utilized by various banks and financial institutions to provide loans. Ever Joy Enterprises can
integrate the cost accounting system with their organizational processes to reduce the costs and
expenses and also eliminate the wastages in the manufacturing system of the enterprises
(Warren, et. al., 2013).
Figure: Types or Techniques of costing
By Author, 2018
8
Types or
Techniques
of costing
Uniform
costing
Marginal
costing
Standard
costing
Absorption
costing
Direct
costing
Historical
costing

Following are the main types or techniques of costing for ascertaining costs:
Marginal costing: Marginal costing is a costing technique in which the variable cost, i.e.,
marginal cost is charged to units of cost, while the fixed cost for the period is totally written off
against the contribution (Kren, 2018). It can be calculated as:
Marginal cost = Direct Material + Direct Labor + Direct Expenses + Variable Overheads
Figure: Characteristics of Marginal Costing
By Author, 2018
Absorption costing: Absorption costing is another important costing technique in which all
manufacturing costs are absorbed by the units produced. It is also known as full absorption
method or full costing. In other words, the cost of a finished unit in inventory will comprise
direct materials, direct labor, and both fixed and variable manufacturing overhead.
Figure: Absorption Costing
9
Determination of price Valuation of stock
Profitability Classification into fixed
cost and variable cost
Charactertistics
of Marginal
Costing

By Author, 2018
Standard costing: Standard costing is a technique of costing in which manufacturers or
producers use it to identify the variances or differences in between the costs that should occurred
for those goods and the actual costs of the goods that were manufactured.
Figure: Standard costs
By Author, 2018
Uniform costing: Uniform costing is the usage of the same costing and accounting principles
and standards or methods uniformly by various undertakings in the same industry. In this costing
the cost statements and reports are prepared on a uniform basis and the period of accounting is
common for all units’ member.
Direct costing: Direct costing is a specialized form of cost analysis that uses variable costs only
to make decisions. This costing does not consider fixed costs and useful in short- term decisions
making in the company. Direct costing is not useful in long- term decision making because it not
considered all costs which are necessary in long- term decision making.
Historical costing: Historical costing is ascertainment of costs after they have been incurred.
This costing considered past work done by the manufacturing undertakings and comparisons
done by using past data of the enterprises (Kren, 2018).
10

c. Inventory Management Systems
Inventory management system is a mechanism through which a business can track all the moving
parts of its operations. This covers everything from production of a product to retail stores and
from warehouse to shipping the product, all the movements of stock are traded in the inventory
management system. In this process system finished goods and work in progress are
systematically managed so that optimal use of available resources can be made. Ever Joy
Enterprises can integrate its system with inventory management system in which enterprises can
use technology to track the inventory level in its business operations (Goddard and Simm, 2017).
Figure: Inventory Management
By Author, 2018
11
Inventory
Managem
ent
Product
Inventory
Product
Purchase
Products
Sales
Product
Inventory
ATP &
CTP
Suppliers
Manager
Accounting
Manager
Inventory
Status
Reports

Benefits of inventory management systems to the Ever Joy Enterprises are listed below:
 It minimized cost of labor and other expenses
 Reduced dead stock problems in the enterprises
 Transparency improved in the whole system
 It minimized costs of handling or storage
 Enhanced partner relationship, vendor and supplier
There are three types of inventory: work-in-progress, finished goods and raw materials. The
enterprises can use inventory control models like ABC (Activity Based Costing), EOQ
(Economic Order Quantity), and JIT (Just in time) model to maximize the profits and minimize
the inventory expenses. The Ever Joy Enterprises can use this model of inventory to eliminate
the wastages and enhance their productivity in entire manufacturing system. Inventory
accounting method include FIFO (First in, first out), LIFO (Last in, first out) and other methods
can be used by the enterprises to calculate the level of inventory in the manufacturing system
(Kren, 2018).
Inventory management also means sustaining the efficient and effective internal controls over
stock or inventory which includes safeguarding the inventory from theft and damage, to track
inventory movement in the system by using a purchase orders, frequently comparing physical
inventory counts with amounts recorded, and maintaining an inventory ledger. The effective
inventory management system assists to the Ever Joy Enterprises to track the record of level of
inventory in their business operations and helpful to the enterprises to reduce the expenditures
which is related to the stock and dead stock in the manufacturing system (Warren, et. al., 2013).
12

d. Job Costing Systems
Job costing method is a tailor-made costing method in which work is completed according to
each customer’s individual requirement. Each job is undertaken keeping into consideration
specific need of the customer. They are nonstandard in nature. Each job belongs to the same
category but has different characteristics. For example, visiting cards or marriage cards printed
by printing press. Although visiting cards fall in the category but they are designed as per the
specific need of the customer (McLaney and Atrill, 2014).
Figure: Job Costing Cost Flows
By Author, 2018
Job Costing can be applied in the following areas: -
 Repair works
 Engineering concerns
 Job printing
 Ship building companies
 Interior decoration
 Furniture makers
 Automobile garages
 Construction companies
13

Features of Job costing
 It focuses on the specific needs of the customers.
 Each job is charged differently.
 Each job is identified clearly.
 Each job is treated as a separate accounting unit.
 Usually the work is done in the factory except in case of interior designing etc.
The job costing systems wants to collect the subsequent three types of information:
Direct materials: The job costing system must be able to record the materials cost that is used
throughout the course of the job. For example, if an organization is manufacturing the custom-
made a machine, the metal piece costs which is used in the manufacturing must be collected and
charged on the job. The system can collect this cost through the manual following of materials
on the sheets of cost, or the data can be gathered from the online terminals in the production and
warehouse area (Kren, 2018).
Direct labor: The job costing needs to record the labor cost which is used in a job. If a job is
associated with the services, the direct labor may include closely all of the job cost. Direct labor
is basically allocated to a job with a time sheet, time card or with a time clock application on a
computer. In all these cases, the user can easily ascertain the job, so that the data related to the
cost can appropriately be applied to the exact job.
Overhead: The system allocates the costs of overhead to one or more costs groups. At the end of
the financial year, the total amount in each cost group is allocated to the many open jobs which
are based on some apportionment procedure that is reliably applied.
14

e. Different types management accounting reports
Reports Explanation Use in the Ever Joy
Enterprises
Budget Reports Budget reports are very
important for the
organization. In this report,
all the department's
performance are recorded in
it. However, all organization
prepares the overall budgets
to maximize the business
operations, profits and also
achieve future goals
(Pratheepkanth, 2018).
It will help the Ever Joy
Enterprises to achieve its
mission and goals while
staying within the budgeted
amount. It will also guide the
managers to provide better
incentives to the employees,
cut costs and renegotiate term
with suppliers and vendors.
Account Receivable Aging
Reports
Account receivable aging
reports are important for the
organization because it shows
the exact amount which is
receivable in the accounting
period. This report shows that
how much debtors are there
and how much debtors
become a bad debt to the
company (Nørreklit and
Mitchell, 2014).
If the organization depend on
extending the credit, then
account receivable aging
reports are important to it.
Ever Joy Enterprises use this
report to record the debtors,
bad- debts which are incurred
in the accounting period. It
also shows the status of each
item records in this report.
Performance Reports The performance report is
prepared by the company to
Ever Joy Enterprises uses this
report to check and review
15

review the performance of the
organization and its
department also. This report
prepared by the organization
on yearly basis to evaluate the
performance (Lasyoud, et. al.,
018).
.
the performance of each
department and the overall
enterprise. The manager of
the Ever Joy Enterprises uses
these reports to prepare key
strategic decisions about the
future of the organization.
.
Cost Managerial
Accounting Reports
This report records the cost of
products which are
manufactured by the
organization. It basically
includes all raw material
costs, labor costs, overhead
costs and any other costs
which is related to the
manufacturing. The cost
report shows a summary of
all of this information
(Goetsch and Davis, 2014).
The Ever Joy Enterprises use
this report to record all the
costs which are associated
with the manufacturing of the
product. This report offers to
the managers the ability to
understand the cost prices of
the products versus their
selling prices. The profits
margins are monitored and
estimated through this report
because it shows the clear
picture of all costs that are
associated with the
production of the products.
Other Managerial
Accounting Reports
This report is consisting of
competitors analysis,
information reports, and
project reports which are very
important for the
The Ever Joy Enterprises will
use this report to record the
information as per the
requirements. The manager of
the enterprises records the
16

organization. The information
is generated from the outside
and inside and recorded in
this report. This report assists
the manager to prepare the
strategic plans for the
organization growth and
development (Kren, 2018).
collected information in this
report. This report provides
authentic and useful
information to the manager
and the management of the
organization.
17

f. The need for a sound accounting system and the importance of the department
producing timely, accurate and relevant information
Accounting system is a systematic way of collecting and recording of the financial transactions
so that it can enable all the stakeholders to assess the performance of the organization.
Accounting can be done either manually or through computerized programs. However, the latter
provides high degree of accuracy prepares various reports without much effort and is very
effective.
Following are various advantages of a sound accounting system: -
 High degree of accuracy: - A sound accounting provides a high degree of accuracy in
the presentation of the final accounts. It minimizes the chances of any embezzlement and
exposes the weakness if any. Sound accounting eliminates chances of errors and presents all the
financial data precisely and accurately (Pratheepkanth, 2018).
 Helps in decision making: - A sound accounting system assists the management to make
better decisions for the business. Since the information provided by the accounting system is
accurate so it enables the management to carefully assess and scrutinize each and every single
aspect and form the future strategies accordingly (Nørreklit and Mitchell, 2014).
 Improves the efficiency of a business: - A sound accounting system eradicates any
chances of discrepancy and presents information timely and accurately which in turn increases
the productivity of the business. Now days with the advent of computerized accounting systems
various reports can be generated with the touch of a button which enables the management to
take the decisions timely that helps in the growth of the business (Goetsch and Davis, 2014).
 Compatibility: - It provides a mechanism for the business to easily share financial data.
Suppose a company purchases another company and both of them are having a sound accounting
system put in place then it would be very easy to integrate the accounts and would save lot of
time and effort (Kren, 2018).
18

Evaluate the benefits of management accounting systems and their applications in the
context of Ever Joy Enterprises.
The various benefits of management accounting systems in context of Ever Joy Enterprises are
describes as below:
 Determine the aims: The management accounting system assists to the manager in determining
the aims and objectives for the company. With the help of it the Ever Joy Enterprises sets their
targets and objectives through which each and every member of the company focuses on this and
achieves them in an appropriate manner (Lasyoud, et. al., 018).
 Helps in preparation of plan: The management accounting system helps to the manager in the
preparation of plans for the growth and prosperity of the company. With the help of management
accounting system, Ever Joy Enterprises prepare the plans after considering all relevant factors
which effects the business operations and these plans helps them to achieve their goals and
objectives in an effective and efficient manner (Otley, 2016).
 Better services to customers: The management accounting system assists to the company to
prepare products and services according to the customers need and want. The management
accounting system assists to the manager of Ever Joy Enterprises to prepare plans and polices
according to the customers desire and market need for the product and services. With the help of
it the company can improve their existing level of production and modify their products and
services according to the needs and preferences of the customers (Nørreklit and Mitchell, 2014).
 Measure the performance: The management accounting system helps the manager to measure
the performance of various departments according to set target which are fixed by the manager.
The actual performances are compared with the planned performance; if any deviations are
arising in the performance it will rectify frequently by the mangers. With the help of
management accounting systems, the manager of Ever Joy Enterprises enhances the performance
of the departments and overall business operations. By doing proper evaluation of the
performance, the manager can easily find out the deviations or errors and correct them by
applying management accounting tools and techniques (Goetsch and Davis, 2014).
19

Task 2 – (LO2)
a. The number of tickets that must be sold to break even (i.e. the point at which there is
neither profit nor loss)
Calculation of Contribution per ticket
Particulars Amount (£)
Fixed Costs 60,000.00
Proposed ticket price for the concert 20
Variable Cost per ticket 10
Contribution per ticket 10
Calculation of Break Even Point (per ticket)
Break Even Point= Fixed Cost/Contribution per ticket 6000
20

b. If we want to make a profit of £30,000.00, how many tickets should be sold?
Calculation of ticket to be sold in order to achieve the desired profits
Particulars Amount (£)
Desired Profits 30,000
Fixed Costs 60,000
Contribution per ticket 10
Ticket to be sold in order to achieve the desired profits
(Fixed costs + Desired profits/Contribution per ticket)
9000
21

c. What profit would result if 8,000 tickets were sold?
Calculation of Profits
Particulars Amount (£)
Sales of tickets 8,000
Contribution 10
Fixed Costs 60,000
Profits = (Sales x Contribution per ticket) – Fixed Costs 20,000
22

Task 3 – (LO3 & 4)
a. You are to evaluate how budgeting can be used by Ever Joy Enterprises as a planning
and problem-solving tool in dealing with financial problems, but also for leading the
organization to sustainable success.
Budgeting
Budgeting is a process of future planning for business operations by creating goals of
performance and placing them into a proper and prescribed plan. In other words, a budgeting is a
proper process of preparing a financial goal for entire company and making a plan to achieve
those goals in an effective and efficient manner. Budgeting plays a vital role in the effective
resources utilization which is available to the company in order to achieve entire goals and
objectives for the company (Nørreklit and Mitchell, 2014).
The following benefits of budgeting in the context of Ever Joy Enterprises are discussed as
below:
 It helps and guides the manger relating to the formulation of plans and policies.
 It also provides a means of monitoring and controlling all expenditure and income of a company.
Budgeting gives a proper spending plan to the manager.
 Budgeting outlines the objectives for the various departments for a specific time period.
 Budgeting is used to measure the plans and policies of the company
 Budgeting includes all the management of different levels to contribute in the goals setting.
 With the help of budgeting the responsibility can easily fixed.
 Budgeting also provides a benchmark that can be used by the manager to measure the
performance of department and employees in the company.
The budgeting assists to the Ever Joy Enterprises to prepare the plans and also helps them to
solve various financial problems of the company. Budgeting is the effective planning tool which
helps the manager to plan for the company growth and prosperity.
23

Following different types of budget helps to the Ever Joy Enterprises in formulating the
plans and policies for various departments which are discussed as below:
Types of Budget Use in the Ever Joy Enterprises
Sales budget The sales budget is the first and basic element
of master budget.
In a sales budget, the number of sales units as
well as earnings from the sales is estimated.
With the help of this budget, the Ever Joy
Enterprises accurately estimates the sales for
their products in the market. The manager can
easily estimate all the sales and evaluate the
performance of sales department (Matambele,
2014).
Production budget It is a financial plan for the company. This
budget lists the number of units to be
manufactured by the production department
during a period.
This budget basically depends upon the sales
budget.
With the help of this budget, the Ever Joy
Enterprises accurately produce the products
for the customers. The manager uses the
production budget to approximate that exactly
how many numbers of units they will need to
yield in future which are based on the future
24

estimated sales (Otley, 2016).
Cash budget The cash budget is main budget for the
company which reflects estimated cash
outflows and inflows during a particular time
period.
The cash budget provides a clear picture to
the company about all expected cash flows
during a specific time period.
This budget helps to Ever Joy Enterprises to
determine that whether the enterprises has
adequate balance of cash to meet out its short-
term requirements of cash or whether too
much cash is being left idle and unproductive
in the company (Warren, et. al., 2013).
25

b. You are to also evaluate how strong financial governance can help to pre-empt or
prevent financial problems for Ever Joy Enterprises and the means by which management
accounting systems can contribute.
Financial governance refers to the way a company manages, collects, monitors and controls the
financial information. The financial governance includes how the company tracks its financial
transactions, control data; manage performance, operations, compliance, and disclosures
(Hosoda, 2018).
The risk of poor financial governance includes:
 Misappropriation
 Fraud
 Regulatory penalties
 Material errors
 Reduced stakeholder confidence, and
 Poor decision making.
Financial governance in action is the procedures and policies which helps the Ever Joy
Company to manage the data of business and make sure that this data is accurate and
correct. It includes:
 Financial policies
 Data validation and tracking
 Workflow
 Data security
 Internal control
26

How the Ever Joy Company improve financial governance?
 Conduct the external and internal audits.
 All corporate data use a single data warehouse.
 Financial data and controls are automated.
 Apply unified and centralized corporate disclosure management software.
 Keep up-to-date on all compliance regulations of the company.
 Risk assessments are frequently conducted.
There are various methods which can be used by Ever Joy Company in order to minimize
the financial problems and improves the performance level. Some of them are discussed as
below:
1. Key Performance Indicators: It is the most important indicators that show how the company
is doing or how well an employee is working in the company. It is also known as key success
indicators which assists the Ever Joy Company and its employees to achieve their defined goals.
Key performance indicators are a form of performance measurement and are commonly used at
both an operational level i.e., to guide the business towards the predetermined goals and at the
staff appraisal level i.e., to help the employees stretch themselves and have an end goal in sight
(Ahmetshina, et. al., 2018).
The cited company can use the ratio analysis as KPI’s to evaluate the financial
performance which is mentioned below:
 Liquidity, Solvency, Debt Ratios
 Operating Activity Ratios
 Revenue Analysis Ratios
 Profitability Ratios
 Break-Even Analysis
 Capital Structure Ratios
 Inventory and Purchasing Analysis Ratios.
27

2. Benchmarking: It is the procedure of measuring the performance of the company’s products,
services, or processes against those of another business considered to be the best in the industry.
The point of benchmarking is to identify the internal opportunities for improvement. By using
the benchmarking, the Ever Joy Company improves their performance and financial problems in
the most effective way (Boscia and McAfee, 2014). There are two basic kinds of improvement
opportunities:
a. Continuous improvement is incremental and it’s involves only small adjustments in the
whole process in the company.
b. Dramatic improvement can do only in the case of when the company changes whole
internal process according to market trend.
Some of the more useful financial benchmarks involve:
 Gross profits, operating profits, and net profits margins
 Compensation data and sales
 Per employee cost
 Per employee revenue
 Marketing expenses as per percent of revenue.
After doing analysis it can be said that the financial governance improves the company’s
performance in the eye of its stakeholders which are an important part of the company’s source
of income. With the help of financialgovernance, the cited company can prevent frauds and other
financial problems. The Ever Joy Company can use the KPI’s and Benchmarking to evaluate the
overall company performance in internal as well as external (Danaei, et. al., 2014).
28

Conclusion
This report finally concluded that management accounting is the important part of the company.
The management accounting provides effective tools and techniques to the manager of the
company to apply in the various reporting system which is easily understandable to all the
departments of the company. This report also stated that while using the budgeting technique the
manager can easily evaluate that how much expenses are incurred or how much income is
generated from the projects. By using the key performance indicators and benchmarking the
cited company solve their financial problems in most effective and efficient manner. Finally, it
can be concluded that proper use of management accounting assists the company to maximize
the profits and achieve the goals and objectives within the specified time period.
29

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